As with domestic sales, it is important to price your product properly when selling a product or service overseas. Pricing your product or service for the international market can be challenging and directly affects your company’s revenues.
Your market research is a vital component when determining pricing and it is essential that your research include all of the variables that can affect the price range of your product. When trying to determine pricing it is important to keep in mind your market objectives, costs, market demand and what your competition is doing. Each one of these factors should be measured according to your company’s objectives for entering a new international market. Pricing your product too high or too low can affect your bottom line and therefore when looking at each one of these variables you should take into consideration an export perspective that may possibly create different export pricing from your domestic prices.
A vital aspect of export pricing is to account for additional costs such as tariffs, currency fluctuation, shipping and transaction costs, value-added taxes (VAT) and custom fees that the importer typically is responsible for. These additional costs can affect the final price that the importer pays and can substantially affect the total.
